Total pays £750,000 to Jersey over dropped North Sea licence

Total has paid £750,000 to Jersey Oil and Gas over a North Sea licence it dropped in 2015.

Two years prior, Total acquired a 30% stake in the “Valleys” licence in the Central North Sea from Jersey – then named Trapoil – with the provision that Jersey would be compensated if Total elected not to drill it.

Following another farm-in process with Norwegian Energy Company (Noreco), Total entered the licence in 2014 with a 35% stake, targeting nine “modest-sized” prospects previously identified.

However, the firm found that these estimates were based on “poor quality seismic data” and that only two prospects had potential, with a combined recoverable resource of less than eight million barrels of oil equivalent.

The “Valleys” licence was dropped by Total after finding it only had two prospects with the potential to recover less than eight million barrels combined

As a result, Total said it “was not in a position to commit to an exploration well”, in its relinquishment report to the Oil and Gas Authority in 2015.

The operator has now agreed to pay Jersey £750,000 for the loss of the potential opportunity.

Jersey chief executive Andrew Benitz said: “We are pleased to have reached agreement on this legacy issue regarding the farm-out of our former interest in Licence P2032, which was relinquished in 2015.”

This comes following a £2million loss for Jersey in its full-year results for 2018.

The firm recently reported disappointment after evaluating Verbier prospect in the outer Moray Firth which has around 25million barrels of oil equivalent.